Anaheim is like virtually every other city in the nation right now — the recession has meant budget deficits and cuts.
Specifically, Anaheim is running a $10-$11 million deficit and has depleted its financial reserves down from $45 million to about $11 million, the Orange County Register reports.
On April 12, the Anaheim City Council is expected to vote on floating bonds to pay for the renovation of the Honda Center and to build a practice facility, steps needed to lure the Kings to the city. (The issue is on this week’s council agenda with a request to continue it to the April 12 meeting. The Council can debate the issue, but traditionally these continuation requests are approved without much if any discussion.)
Already, some residents of the city are opposing that move, the Register adds.
“Aren’t we already facing a huge deficit?” resident Nathan James asked in an email. “What sense does it make to spend more money, especially when this area already has two pro (basketball) teams?”
If enough residents stepped forward to protest, it would kill the deal. But as Anaheim is a city that likes the idea of having another major sports franchise — and this time named after the city, not stuck on like an afterthought at the end — it would take a huge groundswell. Which means it would have to cost the taxpayers directly.
If this bond were structured in a way that the public had to pay for the financing it would have to go to a public vote. So you can bet that’s not how it’s going to go down. The Register suggests the alternative of “revenue bonds.”
Likely, funding would come from private investors and bonds would be paid off with the increased revenues anticipated from the Honda Center, in large part because of the NBA team.
Back in the early 1990s, the city issued bonds to construct the $123 million arena – a debt that was taken on by Ogden, and later by Anaheim Arena Management, the Henry Samueli-owned company that operates the Honda Center and is negotiating to bring the Kings here. Some $36 million in principal is left on that debt.